>> this is nbr. captioning sponsored by wpbt >> susie: good evening. i'm susie gharib. questions about earnings and the economy make investors edgy, and that slams stocks on wall street. >> tom: i'm tom hudson. they say big things come in small packages. apple finally unveils its much anticipated ipad mini with a not-so-mini price tag. >> susie: and is a deal in the works to solve the fiscal cliff? a look at president obama's surprise promise in last night's debate. >> tom: that and more tonight on nbr! for the second time in three sessions, u.s. stocks suffered a sharp sell-off. prices fell as weak financial results from corporate america fed fear about the global economy. at the closing bell, the dow shed 243 points, the nasdaq lost 26.5, the s&p dropped almost 21

points, sending markets to levels not seen since early september. the heavy selling came after several household names reported weak quarterly financial reports and lowered their expectations for the rest of the year. 3-m, dupont, and xerox were among those releasing disappointing results. erika miller reports worries about revenues have cast a shadow over the profit picture. >> reporter: yes, it's earnings season. but earnings are not the most important indicator this quarter. it's revenues-- how much money a company makes before expenses. >> profits can go down, profits can go up. sales, you want to see nice steady growth. and when you are seeing big drops in revenues and revenue misses, that's definitely a red flag. >> reporter: in the latest quarter, a slew of big name firms have reported higher earnings but lower revenues, including bank of america, ibm, 3-m, morgan stanley, oracle, and walgreens.

for most, the biggest problem is europe, where many countries are in recession. it doesn't help that the red-hot growth in emerging markets like china and india is cooling off. the economy in the u.s. may be nothing to brag about, but for many firms, it's actually one of the stronger markets. >> when they talk about weakness, the weakness is everywhere else but the united states, which highlights the united states possibly being the one beacon of hope. and that's where companies need to reinforce there strength in. >> reporter: companies are also trying to boost earnings by cutting costs and selling non- essential assets. others are using the weak quarter as an opportunity to clean up their balance sheets. >> everything but the kitchen sink. you are going to take every write-down, every mark down, everything that you can. get it out of the way, so you look better in the following quarter. >> reporter: but hopes are fading for a strong finish to the year. of the companies that have provided earnings guidance for the fourth quarter, 22 have been

negative and only two have been positive. >> companies are already warning us not to expect too much from them for the fourth quarter. we've received the most negative guidance since we started collecting this data in history. >> reporter: the weak global economy isn't just bad news for big multinational firms; it is forcing many to tighten their belts by limiting hiring and investment, and that's bad news for workers and investors alike. erika miller, nbr, new york. >> susie: so, is today's market sell-off the start of something bigger? alec young joins us with his thoughts. he's global equity strategist at s&p capital i.q. >> susie: alec, we've had a couple of days of pretty big sell-offs. could it get worse? >> i think in the short term, it could, susie. i think what we're seeing on wall street is investors being a little taken aback at the misses on the top line. given all of the uncertainty that we have with the fiscal

cliff and the drag that could pose on revenue growth into 2013, i think there may be room for consensus expectation on revenues to come down a little bit more. if you look at some of the stock market reactions to some of these revenue misses, they've been pretty severe, and i think that's an indication that there's a wide gap between what wall street is expecting and what companies roll delivering. >> susie: but why is this happening now? we all knew that earnings were going to be weak. we know that the global economy is weak, whether you're talking about europe or china. so what's the real issue here? >> well, i think this is the first time we're actually hearing from the company, and all the negatives are being confirmed. again, it comes back to the revenue issue. i think people knew that earnings were going to be fairly soft, but i think people have been surprised at how weak the revenues and the guidance has been, and given the fact that we're facing

some major macro risk that is could mean next year's growth is weaker than this year's, investors are translating that into meaning we could be just at the beginning of a weaker outlook for corporate america, and then they're selling stocks as a result. >> susie: you know what else is kind of confusing here? it seems to be a disconnected between what the companies are saying and the encouraging reports about the economy, whether it's about the housing recovery, retail sales, consumer confidence, and some positive information about the job marketed. so what's the disconnect? >> well, i think the disconnect is that we're facing the fiscal cliff. while the economic data has been improving normally investors would look forward and assume maybe we would see a rebound in the months ahead. i think concerns about the fiscal cliff are trumping that, and while the data is better, if we don't address that until we get certainty there, it's too soon to extrapolate the economic

rebound can continue. the other thing we're seeing is domestic oriented stocks being much better than global stocks and that's what we've been recommending to clients and continue to do that. you want to be in consumer discretionary and avoiding things like materials which tends to be much more exposeed to a lot of these risks global in nature. >> susie: let me switch over to the fed. the federal reserve is holding a policy meet tag wraps up tomorrow. is there anything the fed could say tomorrow that could change investors views about the market? >> i don't think there's really much they can do from a long term perspective. >> short term, encouraging words could generate a short term rally, but overall, given that the fed has already been extremely proactive, i think investors really feel there's a limit as to how much the fed can help, and even chairman bernanke himself said there were limits to monetary policy and he was encouraging the congress to get more proactive on the fiscal front.

>> susie: interesting information alec. alec young from s&p capital. tomorrow, we'll analyze the federal reserve's policy decision on the economy. we talk with the chief economist of to mesirow financial, diane swonk. >> tom: still ahead, as the housing market finds stable ground, other companies are piggy-backing on the home recovery. apple officially unveiled it's newest ipad today, the mini, and it's here just in time for the holidays. the device takes direct aim at other small tablets from amazon and google already on the market. as ruben ramirez reports, the ipad mini may have been what everyone was looking for, but the announcement of a next generation ipad is what caught fans and investors by surprise. ♪ ♪ >> reporter: with a simple tune, apple launched ipad's new sibling, the ipad mini. at nearly eight inches, with a

ten-hour battery life, it sets apple up to go head-to-head with the likes of google's nexus seven, the kindle fire hd, and the galaxy note, which goes on sale tomorrow. >> the tablet market is very price sensitive, and anytime you cut the price, you open up a whole new audience of users by releasing the mini and having that $329 price point, that's going to give them a lot more penetration into the market. >> reporter: in a move that's new for apple, it highlighted the differences between the mini and its competitors, pointing out the screen size and other features. the biggest difference-- price! it's higher than all its competitors, and just $70 less than the cheapest full-size ipad. >> there is a concern that maybe apple could cannibalize some of its existing ipad products through the launch of this new ipad mini, but i think this is going to protect their margins a little bit more. >> reporter: maintaining the amount of money it makes on each device sold is key while apple tries to make inroads into an already crowded market. apple also noted a big milestone, selling 100 million

ipads in just over two years on the market. but for those who bought a new full-sized ipad in the past six months, today's launch of the fourth generation ipad was a big surprise. the new model is twice as fast at the same price. >> it's a bold move on apple's part. i think there will be some grumbling at first, but the existing ipad, the ipad that i bought, is still a very functional device. >> reporter: this won't be the last time you'll see a tech company speeding a next- generation product to market. costa says the entire pace of innovation in the sector is moving at lightening speed. prototypes which once took months or years to create can now be made in just a matter of hours. ruben ramirez, nbr, new york. >> susie: investors "liked" facebook's third quarter earnings as the social media powerhouse showed progress, making money from its mobile users. in its second quarter as a publicly traded company, facebook posted adjusted earnings of 12 cents a share, a

penny above analysts' estimates. revenues also came in slightly better than expected at just over $1.25 billion. the bright spot-- big gains in mobile ad revenues. >> this quarter, mobile advertising accounted for 14%, so that's over $140 million. that's pretty stunning, and that's significantly above what analysts were expecting, so i think what we have here is a little bit of momentum. and if facebook can keep it going, i think the mobile monster that's been plaguing them and sort of keeping the share price down, it could maybe crawl back under the bed for a while. >> susie: facebook shares jumped over 9% in after-hours trading to over $21 a share. but its still well below the i.p.o. price of $38, and analysts think the stock could trade lower as lockups expire and faceook employees unload nearly a billion shares before the end of the year.

>> tom: the presidential campaign is down to its last two weeks, with president o ma and governor mitt romney taking different tactics the day after their latest debate. governor romney released a new ad using a criticism he deployed in last night's debate. >> the president began an "apology tour," going to various nations and criticizing america... >> tom: in his own ad, the president answered critics who say he hasn't laid out his plan should he win re-election. >> here's my plan for the next four years: making education and training a national priority. building on our manufacturing boom. boosting american-made energy. reducing the deficit responsibly

by cutting where we can and asking the wealthy to pay a little more. >> tom: while neither candidates mentioned the fiscal cliff in last night's debate, they did talk a little about the automatic spending cuts piece of the fiscal cliff. >> and i will not cut our military budget by a trillion dollars, which is a combination of the budget cuts the president has, as well as the sequestration cuts. that, in my view, is making... is making our future less certain and less secure. >> first of all, the sequester is not something that i've proposed; it is something that congress has proposed. it will not happen. the budget that we are talking about is not reducing our military spending, it is maintaining it. >> tom: darren gersh is our washington, d.c., bureau chief. >> well, i have to tell you, the defense industry was really excited about this. the ceo of the aerospace industry association had a

conference with reporters and said she left out of her chair with joy when she heard this noise. they're very excite body t. the white house was spending time walking this back saying that basically the president didn't say anything new. the sequester was never intended actually to take effect. that's what the president meant when he said we'll find a way to get past this. what i am hearing from people in washington and familiar with what's going on is that there's more optimism about reaching a deal. wannot huge optimism, but more than there was before. >> tom: every journey starts with a step forward. what conditions has the president put out there publicly in order to avoid a fiscal cliff and get support? >> it seems pretty clear that the president is insisting that the debt limit be extended and raised so that we don't have another one of these cliff hanger decisions about whether or not the u.s. is going to default. he definitely wants to move that off for a year or two.

he's also insisting, though, on more revenue from upper income taxpayers, and that's going to be a huge issue of debate and contention with republicans. >> tom: finally, all of this is going to change in two weeks certainly, but how could it change? how could the tone of the public debate change? >> well, if the president wins his hand is strengthened, and he'll be able to come in and say i toll the american people they wanted more revenue from upper income taxpayers. so let's work that deal out. >> tom: right. >> but i'm also hearing that even if the president loses, there might be a chance to get an agreement in this lame duck session after the election, because the president might want to tie up loose ends. might be his last chance to make a fairly substantial deal on the deficit. >> tom: part of the legacy. darren gersh in washington, d.c. >> thanks, tom.

>> susie: boeing is revving up production of its hot-selling 777 jumbo jet. thanks to heavy demand, boeing is boosting its production rate by 20% on its everett, washington, assembly lines. it's now cranking out eight planes per month. boeing releases third quarter results tomorrow. analysts expect the company's revenues to jump 13% compared to a year ago, even though earnings could be down 20%. target is selling its entire credit card business and getting a new partner. t.d. bank will buy target's credit card portfolio and become the store's exclusive branded credit card issuer. the price tag, just under $6 billion, is equal to the size

of target's credit card receivables-- what customers owe the retailer. the deal opens the way for t.d. bank to expand its credit card portfolio and target can pay down its debt. target shares rose slightly on the news, but tom, for most other companies, it was a day in the red as investors bailed out of stocks. >> tom: let's get going with tonight's "market focus." u.s. stocks suffered another sharp sell-off. it started right at the opening bell after sour earnings from two global giants, dupont and 3m. the index finished lower by 1.4%. looking at the s&p 500 exchange traded fund, year to date, the sell-off today and friday have taken the e.t.f. to its lowest level since early september. we have a closer analysis of that chart from michael kahn on

our web site, nbr.com. it's under the blogs tab. trading volume totaled 668 million shares on the big board; 1.8 billion traded on the nasdaq. all ten of the major stock sectors were lower, led by the materials sector, down 3% and energy falling 2.4%. the financial sector was down 1.6%. chemical giant dupont pushed the materials group down. as erika mentioned earlier, dupont was among the companies with a disappointing quarter and outlook. earnings per share were 14 cents less than estimates. revenues also came up short. the company will cut 1,500 jobs, blaming half the cuts on a weaker economy. shares fell hard, down 9.1% on heavy volume. it was the leading percentage loser among dow jones industrial stocks. 3m also pressured the dow with shares falling 4.1%.

this is the stock's lowest close since late july. it was a familiar refrain. quarterly earnings were less than estimated and revenue was disappointing. the company cut its forecast, thanks in part to a strengthening u.s. dollar cutting into its overseas profit margins. other big names moving after their earnings today included united technologies, down 1%. u-t-x cut its sales outlook after better than expected earnings. xerox fell 5.1%. it lowered its forecast as sales continue falling. u.p.s. also had disappointing revenues but shares rallied 3%, thanks to growing shipping volume. after the close tonight, netflix warned its international expansion will erase profits this quarter. the third quarter was stronger than anticipated, even though earnings were way down from last year. its more profitable dvd-by-mail business continues losing subscribers while its online

business continues picking up. after closing higher by a half a percent, shares fell more than 16%, trading around $57 per share in after-hours action after warning of potential losses this quarter. sirius/xm radio was also in focus in late trading. it fell another 2% from today's closing price. c.e.o. mel karmazin will step down in february. liberty media has been pushing to take control of the satellite radio provider. four of the five most actively traded exchange traded products were down by at least 1%. the lone gainer was the s&p 500 volatility note, which usually moves in opposite direction that the broad market. and that's tonight's "market focus."

>> susie: whirlpool is riding the tide of higher prices in north america. the company reported third quarter earnings today that beat analyst estimates by 20 cents and far exceeded what it made in the same quarter a year ago. the company also lifted guidance for the full year based on improved sales of appliances to building contractors. whirlpool is benefiting from the recovery in the housing market as americans are taking on more home improvement projects. diane eastabrook takes a look at how that pick-up in housing is spreading to other parts of the economy as well >> reporter: it looks like home sales are finally out of the dog house. with mortgage rates at historic lows, housing starts have

reached their highest levels in four years. wells fargo housing economist richard dekaser says housing currently comprises only about 2.5% of u.s. gross domestic product, but as it improves, he thinks it will have a dramatic influence on the economy. >> people go out and they buy new homes, and they purchase various kinds of merchandise furniture and appliances, for instance. that has a ripple effect which makes its way into the broader economy, and ultimately this has a powerful effect on overall macro-economic growth. >> reporter: that's already beginning to happen for home improvement chains like home depot and lowes. the stocks of both companies have been tracking improvement in the housing market for several months. >> what we are seeing is that, with the improvement in the unemployment rates, they are benefiting from increased traffic and an increase in repair and remodeling activities. so i think that a lot of that has to do with the trends that we are seeing in the housing market today. >> reporter: tighter inventories of both new and existing homes

is adding another dynamic to the u.s. economy. last week, the national association of realtors reported home prices jumped more than 10% year over year. wells fargo's dekaser says that is creating a wealth effect that could influence everything from clothing to car sales. >> the rule of thumb that economists go by is for each dollar increase in wealth, there will be stimulated consumer spending to the tune of about five cents over time. however, research has found that response to rising real estate values is even greater than other asset values. >> reporter: dekaser emphasizes the housing market is still in the early stages of a recovery, so another recession or rising unemployment could derail home sales and sales of everything else that goes with them. diane eastabrook, nbr, chicago. >> tom: tomorrow on nbr, the latest on housing with new home sales as we continue our week- long housing coverage.

and a look at the video game industry ahead of the holidays as the company behind farmville, zynga, looks for a new hit. >> susie: just their first names were enough to sell products: tiger and lance. the two were among the best known athletes nike used to sell its gear. but as scandals brought disgraces to both of them, nike is moving away from the celebrity endorsers it created. here's sports analyst rick horrow. >> tiger woods and lance armstrong helped nike sell billions of dollars of clothes and sporting equipment, leading to profits for shareholders. but the egregious scandals surrounding them, and the changing nature of star athlete endorsements, mean nike's new multi-billion dollar advertising campaigns are moving away from celebrity and to average joe. the shift to using non- celebrities sometimes is made out of necessity, such as during the olympics when nike wasn't an official sponsor. unable to feature olympians during an imposed marketing blackout, the company's "find

your greatness" campaign showcased everyday athletes. heinken's dos equis beer brand spokesman is the most interesting man in the world. berkshire hathaway's geico insurance unit uses the geico caveman. companies with large marketing budgets don't always rely on celebrities in ads. for nike, following the downfall of two of its most prominent endorsers, creative campaigns featuring the athlete next door are a safer allocation of ad dollars when it comes to driving sales. i'm rick horrow. >> tom: finally tonight, a major gift for new yorkers. billionaire hedge fund manager john paulson pledged $100 million to the central park conservancy. it's the largest gift ever to a public park. half will go to the park's endowment, the rest will be used to spruce things up. after all, central park is 155 years old. paulson called central park the most deserving of all the city's cultural institutions, and said his grandparents had their first date there.

paulson's known for making billions by betting on the collapse of the housing market. >> susie: lovely donation. >> tom: that's "nightly business report" for tuesday, october 23. good night, susie, and good night, everyone. >> susie: good night, tom. thanks for watching, everyone. we'll see you online at nbr.com, and back here tomorrow night. captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org

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